If the coin isn’t profitable, people will stop mining it. Despite the mayors of both cities officially endorsing them, MiamiCoin (MIA) and NewYorkCityCoin (NYC) have dropped 90% and 80% respectively since their all-time highs.
Despite Mayors’ Backing, Miami And NYC Coins Are Falling
MIA’s price has plunged 92% from its all-time high of $0.055 on Sept. 20 to $0.004 at the time of writing. While the value of NYC has dropped by 80% from its March 3 high of $0.006 to $0.0014.
Due to recent investor losses in other crypto assets, demand for MIA and NYC coins has almost completely dried up.
The pair’s trading volume in the last 24 hours was just $70,190 and $45,663, respectively. When MIA and NYC were at ATH levels, they respectively generated $1.6 million and $260,000 in 24 volumes.
Miami mayor Frances Suarez has spoken about MIA’s possible uses on several occasions, most notably announcing in February that the city had disbursed $5.25 million from its reserve pocket to support a rental assistance program.
In November, New York City mayor Eric Adams welcomed the city with open arms, saying, “We’re happy to welcome you to the global home of Web3!” We rely on technology and innovation to propel our city forward.”
The assets were created by the CityCoins project, a Stacks layer-on blockchain-based protocol aimed at providing crypto fundraising routes for local governments like Miami and New York City, which are now its only partners.
Despite any potential legal difficulties, CityCoins’ smart contracts automatically distribute 30% of all mining rewards to a reserve wallet for the associated city, the money can be used for whatever the city wants, such as aiding the homeless or funding enforcement activities.
And with miners receiving the remaining 70%, to gain rewards in Stacks and Bitcoin, the tokens can be used for a variety of purposes, including rewards, local advantages, access control (to digital or real areas), trading, smart contract execution, lending, and more.” Coins might be used to get discounts at local shops, for example.
According to CityCoins community head Andre Serrano, the value of reserve wallets in Miami and New York City was roughly $24.7 million and $30.8 million, respectively, in January this year, indicating that there was a reasonably high community desire to mine the asset at the time.
While the governments have profited from the collaborations, the user/investor side appears to share mining profits, and a claimed 9% yearly BTC yield from “stacking” (basically staking) assets on the Stacks blockchain isn’t appealing enough to drive high demand.
If additional utility isn’t added to catch the currencies may become useless to cities:
“If people can’t earn money off of the coin, they’ll quit mining it, and the only way they can make money off of it is by convincing greater fools to participate.”
Officials should first figure out how the coin will be utilized, how regular Miami and New York people may purchase it, and how mining and staking (or stacking) the coin will benefit them. Only then, and not before, would it make sense to draw attention to purchase the coins.